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From oil to consumer energy prices: How much asymmetry along the way?

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  • Venditti, Fabrizio

Abstract

A longstanding question in macroeconomics is whether fuel prices react more to increases than to decreases of the price of oil. This paper analyzes the response of weekly gasoline and gasoil prices to oil prices in the U.S., the euro area and the four largest euro area countries (Germany, France, Italy and Spain) using nonlinear impulse response functions and forecast accuracy tests. While for the U.S. both approaches point to the presence of asymmetries in the adjustment of retail prices, for the euro area the evidence is mixed.

Suggested Citation

  • Venditti, Fabrizio, 2013. "From oil to consumer energy prices: How much asymmetry along the way?," Energy Economics, Elsevier, vol. 40(C), pages 468-473.
  • Handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:468-473
    DOI: 10.1016/j.eneco.2013.07.008
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nie, Pu-yan & Yang, Yong-cong, 2016. "Effects of energy price fluctuations on industries with energy inputs: An application to China," Applied Energy, Elsevier, vol. 165(C), pages 329-334.
    2. Joëts, Marc & Mignon, Valérie & Razafindrabe, Tovonony, 2017. "Does the volatility of commodity prices reflect macroeconomic uncertainty?," Energy Economics, Elsevier, vol. 68(C), pages 313-326.
    3. Christiane Baumeister & Lutz Kilian, 2014. "Do oil price increases cause higher food prices?," Economic Policy, CEPR;CES;MSH, vol. 29(80), pages 691-747, October.
    4. Joëts, Marc & Mignon, Valérie & Razafindrabe, Tovonony, 2017. "Does the volatility of commodity prices reflect macroeconomic uncertainty?," Energy Economics, Elsevier, vol. 68(C), pages 313-326.
    5. Whistance, Jarrett & Ripplinger, David & Thompson, Wyatt, 2016. "Biofuel-related price transmission using Renewable Identification Number prices to signal mandate regime," Energy Economics, Elsevier, vol. 55(C), pages 19-29.
    6. Alberto Bagnai & Christian Alexander Mongeau Ospina, 2016. "Price asymmetries in the European gasoline market," a/ Working Papers Series 1602, Italian Association for the Study of Economic Asymmetries, Rome (Italy).
    7. Valadkhani, Abbas, 2014. "Dynamic effects of rising oil prices on consumer energy prices in Canada and the United States: Evidence from the last half a century," Energy Economics, Elsevier, vol. 45(C), pages 33-44.
    8. Bastianin, Andrea & Galeotti, Marzio & Manera, Matteo, 2014. "Forecasting the oil–gasoline price relationship: Do asymmetries help?," Energy Economics, Elsevier, vol. 46(S1), pages 44-56.
    9. repec:bin:bpeajo:v:47:y:2016:i:2016-02:p:287-357 is not listed on IDEAS
    10. repec:eee:jocoma:v:13:y:2019:i:c:p:1-15 is not listed on IDEAS
    11. Christiane Baumeister & Lutz Killian, 2016. "Lower Oil Prices and the U.S. Economy: Is This Time Different?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(2 (Fall)), pages 287-357.
    12. Sbrana, Giacomo & Silvestrini, Andrea & Venditti, Fabrizio, 2017. "Short-term inflation forecasting: The M.E.T.A. approach," International Journal of Forecasting, Elsevier, vol. 33(4), pages 1065-1081.
    13. repec:gam:jsusta:v:10:y:2018:i:4:p:1080-:d:139614 is not listed on IDEAS
    14. Yufeng Chen & Guobin Huang & Lihua Ma, 2017. "Rockets and Feathers: The Asymmetric Effect between China’s Refined Oil Prices and International Crude Oil Prices," Sustainability, MDPI, Open Access Journal, vol. 9(3), pages 1-19, March.
    15. Cristina Conflitti & Matteo Luciani, 2017. "Oil Price Pass-Through into Core Inflation," Finance and Economics Discussion Series 2017-085, Board of Governors of the Federal Reserve System (US).
    16. repec:eee:energy:v:125:y:2017:i:c:p:97-106 is not listed on IDEAS
    17. repec:eee:eneeco:v:63:y:2017:i:c:p:314-321 is not listed on IDEAS
    18. Lutz Kilian, 2014. "Oil Price Shocks: Causes and Consequences," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 133-154, October.
    19. repec:eee:eneeco:v:78:y:2019:i:c:p:165-173 is not listed on IDEAS
    20. Sam Olofin & Afees A. Salisu, 2017. "Modelling oil price-inflation nexus: The role of asymmetries and structural breaks," Working Papers 020, Centre for Econometric and Allied Research, University of Ibadan.

    More about this item

    Keywords

    Energy; Oil prices; Asymmetry; Inflation;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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